Manorama Indust.

Manorama Industries reported an exceptional financial performance in FY26, with standalone revenue growing by 76.1% year-on-year to reach ₹1,357 crores. This robust growth was primarily driven by increased sales volumes and an optimized product mix, reflecting strong global demand for specialty fats and cocoa butter equivalents. The company achieved a healthy EBITDA margin of 27.1% and a PAT margin of 17.2% for the full fiscal year, underscoring its operational efficiency and market relevance.

The company has committed approximately ₹460 crores in strategic capital expenditure over the next two to three years to support its long-term growth trajectory. This investment program includes establishing a new solvent fractionation manufacturing facility for various exotic seeds, expanding refining capabilities by an additional 200 tons per day, and commissioning raw material processing units in Burkina Faso. These initiatives are aimed at deepening competitiveness, securing reliable long-term supply, and reinforcing the foundation for sustained growth, with ₹52 crores already spent.

Manorama Industries successfully increased the installed capacity of its solvent fractionation plant 2 by 30%, from 25,000 tons per annum to 32,500 tons, through debottlenecking. A similar debottlenecking initiative for solvent fractionation plant 1 (15,000 metric tons) is planned for the current fiscal year (FY27). The company anticipates utilizing 85-90% of its total expanded capacity of 52,000 tons in FY27, which is expected to drive significant volume-led growth and contribute to revenue expansion.

The company demonstrated significant improvement in its working capital management, with the working capital cycle reducing to 125 days in FY26 from 151 days in FY25. This efficiency contributed to a strong operating cash flow of ₹259.4 crores for the fiscal year. Manorama Industries maintains a healthy balance sheet with a net debt to equity ratio of 0.38:1 as of March 31, 2026, and possesses a free cash Fixed Deposit of approximately ₹130 crores, providing ample liquidity for its planned internal funding of expansion projects.

The company's consolidated gross margin for Q4 FY26 was 43%, which was 5% lower than its standalone margin. This difference is attributed to initial setup costs, including employee and establishment expenses, and other operating overheads associated with the nine newly incorporated international subsidiaries, which are in their first year of operation. Management views these as temporary and transitional costs, expecting them to normalize as the operations scale up, leading to a convergence of consolidated margins towards the sustainable 25-27% EBITDA band.

A key component of the company's capex plan is the ₹120 crores investment in a raw material processing plant in Burkina Faso, West Africa. This backward integration project is designed to eliminate logistic costs associated with importing seeds and improve processing efficiency and yield, particularly for shea nuts. Management emphasized that this is a government-backed project, with an MoU signed with the Burkina Faso government, which helps mitigate political risks and ensures a sustainable supply chain.

Manorama Industries has successfully optimized its product mix, with the contribution of Cocoa Butter Equivalents (CBE) to its top line increasing significantly to approximately 30% currently, up from 10% two years ago. This strategic shift towards higher value-added products, combined with continuous innovation and improved operational efficiency, has been a crucial factor in driving the company's strong financial performance and maintaining robust margins.